Chapter 1 Introduction of Electronic commerce 1. 1 Development of Electronic Commerce(e-commerce 1.1.1 Histor Throughout history, attempts to promote new means of communication were simply means with which to increase opportunities for ease, efficiency and security. The foundations on which electronic commerce is based started 125 years ago with the use of telegraph technology to relay information concerning the transfer of funds, such as the stock ticker and Westem Unions Money Transfer system. Payment for goods with payment instruments and representations thereof, namely the advent of credit cards in 1914, revolutionized commerce for consumers, as needs for efficiency and ease of transactions were met Banks were the first institutions to automate commerce functions The fomation of first data resources and first Financial Management Corporation in 1971 as credit card processors for banks integrated banking with technological improvements. Electronic commerce continued in the 1980,s with the advent of Automatic Tellers, or ATMs, in 1986. The same technology information traveling electronically over wires was the basis for the Internet 1. 1.2 Development of e-commerce in Europe, North America and Asia Business on the web is beginning its second decade. What is the current state of lectronic commerce? At the beginning of the century, commentators and pundits were competing to announce the most optimistic projections for the growth of ecommerce. For mple Tab, forrester Research predicts that by 2004, online commerce will reach $6. 8 trillion(see Table1-1). This huge amount comprises Forrester's projection for both business-to-business and business-to-consumer transactions online I Table 1-1 Globalization of e-commerce World e Commerce Growth Projections Country/Language 2002 2004 e-commerce(2004) United States Ts1411s3,189047% United Kingdom S83.2 28884.2 australia 369 20763% Canada 680 160.32.3% Subtotal s15994[53:457|566% s1468□s880313% Germany $1020s386515.7% Other Asia Pacific(mostly$63.6$356.2.2% Internet:http://www.slis.indiana.edu/faculty/hrosenba.www/l561/syll
Chapter 1 Introduction of Electronic Commerce 1.1 Development of Electronic Commerce (e-commerce) 1.1.1 History Throughout history, attempts to promote new means of communication were simply means with which to increase opportunities for ease, efficiency and security. The foundations on which electronic commerce is based started 125 years ago with the use of telegraph technology to relay information concerning the transfer of funds, such as the stock ticker and Western Union's Money Transfer system. Payment for goods with payment instruments and representations thereof, namely the advent of credit cards in 1914, revolutionized commerce for consumers, as needs for efficiency and ease of transactions were met. Banks were the first institutions to automate commerce functions. The formation of First Data Resources and First Financial Management Corporation in 1971 as credit card processors for banks integrated banking with technological improvements. Electronic commerce continued in the 1980's with the advent of Automatic Tellers, or ATM's, in 1986. The same technology 、information traveling electronically over wires was the basis for the Internet.. 1.1.2 Development of e-commerce in Europe, North America and Asia Business on the web is beginning its second decade. What is the current state of electronic commerce? At the beginning of the century, commentators and pundits were competing to announce the most optimistic projections for the growth of ecommerce. For example: Forrester Research predicts that by 2004, online commerce will reach $6.8 trillion (see Table1-1). This huge amount comprises Forrester's projection for both business-to-business and business-to-consumer transactions online.1 Table1-1 Globalization of E-commerce World eCommerce Growth Projections Country/Language 2002 2004 % e-commerce(2004) United States $1,411.3 $3,189.0 47% United Kingdom $83.2 $288.8 4.2% Australia $36.9 $207.6 3% Canada $68.0 $160.3 2.3% Subtotal $1,599.4 $3,845.7 56.6% Japan $146.8 $880.3 13% Germany $102.0 $386.5 5.7% Other Asia Pacific (mostly $63.6 $356.2 5.2% 1 Internet: http://www.slis.indiana.edu/faculty/hrosenba.www/L561/syll
China france 49.1 20643% orea s393「5320573% 33.8 S424 Mexico $15.9 s107016% Netherlands S307 983 1.4% Latin america sl37s818 1.2% Other countries s133.9s479.57% Subtotal 6288□52,9441432 Total($B) s2,312「56,7898982% Here's another perspective Raising its estimates for internet e-commerce, eMarketer's newly released eCommerce: B2B Report forecasts that worldwide business-to-business will grow to $2.7 trillion by 2004, an increase from the $226 billion reported at year-end 2000 in Europe eMarketer's analysis indicates that in 2003, 19% of the Western European population was an online buyer, equating to 75 million people, or 45.5% of all Internet users. The four larges countries in the region, France, Germany, Italy and the UK, are all at different stages e-commerce development and, despite the fact that Germany has the largest population in West Europe, the UK leads all other countries in B2C e-commerce(see Figurel-1) ness to business ecommerce revenu Business to consumer ecommerce A431 19992000 19992000 Number of online users Number of expected buyers 1992000 19s92000 072003 igure 1-1 The Situation of E-commerce in Westem Europe The UK had 15.7 million online buyers in 2003, spending, on average, E745 each and generating Ell.7 billion in B2C e-commerce revenue. This compares with Germany at E9. 1 billion france at U2.9 billion and Italy at El.6 billion. The Netherlands, Switzerland and Sweden are also large e-commerce markets because of their experienced Internet populations and each of these countries generated well in excess of El billion in e-commerce revenue in 2003
China) France $49.1 $206.4 3% Korea $39.3 $205.7 3% Italy $33.8 $142.4 2.1% Mexico $15.9 $107.0 1.6% Netherlands $30.7 $98.3 1.4% Latin America $13.7 $81.8 1.2% Other countries $133.9 $479.5 7% Subtotal $628.8 $2,944.1 43.2% Total ($B) $2,231.2 $6,789.8 98.2% Here's another perspective: Raising its estimates for internet e-commerce, eMarketer's newly released eCommerce:B2B Report forecasts that worldwide business-to-business will grow to $2.7 trillion by 2004, an increase from the $226 billion reported at year-end 2000. 1. in Europe eMarketer's analysis indicates that in 2003, 19% of the Western European population was an online buyer, equating to 75 million people, or 45.5% of all Internet users. The four largest countries in the region, France, Germany, Italy and the UK, are all at different stages of e-commerce development and, despite the fact that Germany has the largest population in Western Europe; the UK leads all other countries in B2C e-commerce (see Figure1-1). Figure1-1 The Situation of E-commerce in Western Europe The UK had 15.7 million online buyers in 2003, spending, on average, €745 each and generating €11.7 billion in B2C e-commerce revenue. This compares with Germany at €9.1 billion, France at Û2.9 billion and Italy at €1.6 billion. The Netherlands, Switzerland and Sweden are also large e-commerce markets because of their experienced Internet populations and each of these countries generated well in excess of €1 billion in e-commerce revenue in 2003
2. North america q There is mounting evidence of the gains that enterprises derive from adopting e-business.For example, a survey(Varian et al. 2002)of the impact of Internet use on a sample of some 2,000 orporations in the United States showed that the corporations achieved accumulated savings of $155.2 billion and revenue increases of $443.9 billion between 1998 and 2001. The same study surveyed 634 corporations in France, Germany and the United Kingdom, where the Internet generated savings amounted to $8.3 billion and the additional revenue to $79 billion. By 2010 the accumulated savings for the US sample of enterprises alone are expected to rise to $528.3 billion and the accumulated additional revenues are projected to be $1, 551.9 billion. A that enterprises believe preparing themselves for e-business pays off is the fact that, while investment in information technology (IT) in general decreased by 6.2 per cent in 2002, e-business budgets (for projects in areas such as customer relationship management, procurement, supply chain management, electronic payment and settlement, and enterprise application integration) rose an estimated 1l per cent; in 2003 growth in e-business investment fell to 4 per cent, but this rate was twice as high as the growth in overall IT investment(see Figurel-2) Business to business ecommerce revenue Business to consumer ecommerce revenu 1992000200 19s92000200120022003 Number of online users Number of expected buyers 19992000 2003 Figure 1-2 The Situation of E-commerce in USA 3. Asia stly from the point of view of the relative positions of developed and developing countries,the tion has continued to move towards a growing presence of developing countries on the Internet, although this remains largely concentrated in a relatively small number of nations. Five countries (China, Republic of Korea, India, Brazil and Mexico) account for 61.52 per cent of all Internet users in the developing world. At the end of 2003, almost three out of four Internet users in developing countries lived in the developing countries of Asia, as did two thirds of all the new Internet users in the world. Table 1.2 shows the distribution of Internet users between the developed and the developing countries and the recent evolution of the number of Internet users by region(see Figure1-3)
2. North America There is mounting evidence of the gains that enterprises derive from adopting e-business. For example, a survey (Varian et al. 2002) of the impact of Internet use on a sample of some 2,000 corporations in the United States showed that the corporations achieved accumulated savings of $155.2 billion and revenue increases of $443.9 billion between 1998 and 2001. The same study surveyed 634 corporations in France, Germany and the United Kingdom, where the Internetgenerated savings amounted to $8.3 billion and the additional revenue to $79 billion. By 2010 the accumulated savings for the US sample of enterprises alone are expected to rise to $528.3 billion, and the accumulated additional revenues are projected to be $1,551.9 billion. A sign that enterprises believe preparing themselves for e-business pays off is the fact that, while investment in information technology (IT) in general decreased by 6.2 per cent in 2002, e-business budgets (for projects in areas such as customer relationship management, procurement, supply chain management, electronic payment and settlement, and enterprise application integration) rose an estimated 11 per cent; in 2003 growth in e-business investment fell to 4 per cent, but this rate was twice as high as the growth in overall IT investment (see Figure1-2). Figure1-2 The Situation of E-commerce in USA 3. Asia From the point of view of the relative positions of developed and developing countries, the situation has continued to move towards a growing presence of developing countries on the Internet, although this remains largely concentrated in a relatively small number of nations. Five countries (China, Republic of Korea, India, Brazil and Mexico) account for 61.52 per cent of all Internet users in the developing world. At the end of 2003, almost three out of four Internet users in developing countries lived in the developing countries of Asia, as did two thirds of all the new Internet users in the world. Table 1.2 shows the distribution of Internet users between the developed and the developing countries and the recent evolution of the number of Internet users by region (see Figure1-3)
Table 1.2 Internet users by region, 2000-2003( thousands gRowth 2002 Growth 2 Growth 211202 109257 Europe 18897 76232 143584 30 110824 Latin America and Caribbean 44217 42439 29224 17673 North America(2002) 175110000175110 156823 136971 11607 754 206 388746 15 19 285490 Developing countries 2201832580133748 Others 32634 1541 76行212 67567879462657926364958962795 397532 Business to business ecommerce revenue Business to consumer e commerce revenue 三 1999200000120022003 19992000X 20022003 Number of online users Number of expected buyers 19992000200120022003 19992000 20022003 Figure 1-3 The Situation of E-commerce in Asia Pacific Region Increasingly, there are synergies between the regions leading operators and vendors, in particular in the telecommunications sector. For example, a Japanese mobile Internet provider has set up a research and development facility in China to develop fourth-generation technology (ElU, 2004). Also, Asia is an emerging market for outsourcing, as evidenced by India's IT-enabled service sector, call centres in the Philippines, customer help desk centres in Malaysia, and Korean-language and Japanese-language software production houses in China 4 Basic connectivity and related investment remain low in many countries; for example, India ranks 46th in the elU e-readiness ranking and 45th in the nri ranking despite its strong outsourcing sector (estimated at $17 billion annually) The Asia Foundation has carried out a project to survey the use of the Internet and e-commerce in four South-East Asian countries -Indonesia, thePhilippines, Sri Lanka and Thailand. The datawere collected at the end of 2001. Since then, many companies have connected to the Internetand thus some of the results may look differenttoday. Furthermore, the selection of SMEs for thesurvey was not based on a random sampling, because Internet penetration was too low at thatstage(i. e. the number of companies using theinternet as a percentage of total Internet
Table 1.2 Internet users by region, 2000–2003 (thousands) Figure1-3 The Situation of E-commerce in Asia Pacific Region Increasingly, there are synergies between the region’s leading operators and vendors, in particular in the telecommunications sector. For example, a Japanese mobile Internet provider has set up a research and development facility in China to develop fourth-generation technology (EIU, 2004). Also, Asia is an emerging market for outsourcing, as evidenced by India’s IT-enabled service sector, call centres in the Philippines, customer help desk centres in Malaysia, and Korean-language and Japanese-language software production houses in China.4 Basic connectivity and related investment remain low in many countries; for example, India ranks 46th in the EIU e-readiness ranking and 45th in the NRI ranking despite its strong outsourcing sector (estimated at $17 billion annually). The Asia Foundation has carried out a project to survey the use of the Internet and e-commerce in four South-East Asian countries – Indonesia, thePhilippines, Sri Lanka and Thailand. The datawere collected at the end of 2001. Since then,many companies have connected to the Internetand thus some of the results may look differenttoday. Furthermore, the selection of SMEs for thesurvey was not based on a random sampling,because Internet penetration was too low at thatstage (i.e. the number of companies using theInternet as a percentage of total Internet
users wasstill very small). Therefore the companies are notrepresentative of all SMEs in each country and the surveys do not reveal how many companies use the Internet Rather, they look at those that use the Internet, plus some non-users and prospective users 1. 1.3 The Development of E-commerce in China In China, the wage is still relatively lower than that in developed countries. Chinese customers wouldnt choose electronic business for the reason of convenience. unless the commodities are cheap enough, which is an obvious fact. On the other hand, if electronic business can be combined with entertainment or recreational activities, the shop on net will ome more attractive;this is also the important prerequisite of B2c development. As is known to all shopping on net is not cheap in China now, and there are not yet enough recreational activities on the net, so we can't deduce that Chinese B2C has found its marketable power of development. For same reason, we can't say that Chinese B2C is in a period of developing fast. But we can prophesy that this period will arrive soon, for the following three reasons Firstly, large sums of money have been invested in the information infrastructure. Now the condition for E-commerce development in China is being upgraded continuously Secondly, the latent customer, such as the young people who have received higher education will accept B2C quickly Thirdly, people's living standard is rising Normally, people begin to value life quality when the per capita GDP reaches 3000 dollars. This signifies that people will pursue higher efficiency of doing household choirs so as to have more leisure time. a number of cities in east China have their per capita GDP exceeding 3000 dollars, which will double in ten years. Even though B2C well known to customers, B2B trade will exceed B2C in 3 years. Due to a report of IDC, the general value of Chinese B2B market will be 2.3 billion U.S. dollars in 2003. A report of Gartner Group points out that global B2B electronic commerce will climb to 7.29 trillion dollars in 2004 Why is B2B developing so quickly? A major reason should be that the E-commerce technology could reduce the trade cost of enterprises. Enterprises, big or small, have great demand for B2B trade. However, most of Chinese enterprises only utilize B2B at product purchase and sale. B2B has huge development space in China, but it needs a period of time to develop, because a lot of enterprises in China have defects in their systems 1.1.4 The Prospect of E-commerce Development The prospect that e-commerce transactions may gain a sizeable share of overall commerce is only one dimension of why the Internet is generating such interest. The open structure of the Internet and low cost of using it permit the interconnection of new and existing information and communication technologies, and offers businesses and consumers a new and powerful information system and a new form of communication. This makes it possible for buyers and sellers to come together in more efficient ways and is creating new marketplaces and opportunities for the reorganization of economic processes. It is also changing the way products are customized distributed and exchanged and how businesses and consumers search and consume products 1.2 Definition of e-commerce and categories of e-commerce 1.2.1 Definition of e- Electronic Commerce seems to be everywhere these days. It's nearly impossible to open newspaper or magazine without coming across an article about how Electronic Commerce is going to change all our lives. Businesses of all sizes are bombarded with adverts that seem to imply that any company not investing in E-Commerce will be left behind Electronic Commerce(EC) is the process of buying, selling, or exchanging products, service and information via computer networks 1. ec defined from these perspectives From a communications perspective, EC is the delivery of goods, services, information, or payments over computer networks or by any other electronic means From a business process perspective, EC is the application of technology toward the automation of business transactions and work flow From a service perspective, EC is a tool that addresses the desire of firms, consumers, and
users wasstill very small). Therefore, the companies are notrepresentative of all SMEs in each country and the surveys do not reveal how many companies use the Internet. Rather, they look at those that use the Internet, plus some non-users and prospective users. 1.1.3 The Development of E-commerce in China In China, the wage is still relatively lower than that in developed countries. Chinese customers wouldn't choose electronic business for the reason of convenience, unless the commodities are cheap enough, which is an obvious fact. On the other hand, if electronic business can be combined with entertainment or recreational activities, the shop on net will become more attractive; this is also the important prerequisite of B2C development. As is known to all, shopping on net is not cheap in China now, and there are not yet enough recreational activities on the net, so we can't deduce that Chinese B2C has found its marketable power of development. For the same reason, we can't say that Chinese B2C is in a period of developing fast. But we can prophesy that this period will arrive soon, for the following three reasons: Firstly, large sums of money have been invested in the information infrastructure.Now the condition for E-commerce development in China is being upgraded continuously. Secondly, the latent customer, such as the young people who have received higher education will accept B2C quickly. Thirdly, people’s living standard is rising. Normally, people begin to value life quality when the per capita GDP reaches 3000 dollars. This signifies that people will pursue higher efficiency of doing household choirs so as to have more leisure time. A number of cities in east China have their per capita GDP exceeding 3000 dollars, which will double in ten years. Even though B2C is well known to customers, B2B trade will exceed B2C in 3 years. Due to a report of IDC, the general value of Chinese B2B market will be 2.3 billion U.S. dollars in 2003. A report of Gartner Group points out that global B2B electronic commerce will climb to 7.29 trillion dollars in 2004. Why is B2B developing so quickly? A major reason should be that the E-commerce technology could reduce the trade cost of enterprises. Enterprises, big or small, have great demand for B2B trade. However, most of Chinese enterprises only utilize B2B at product purchase and sale. B2B has huge development space in China, but it needs a period of time to develop，because a lot of enterprises in China have defects in their systems. 1.1.4 The Prospect of E-commerce Development The prospect that e-commerce transactions may gain a sizeable share of overall commerce is only one dimension of why the Internet is generating such interest. The open structure of the Internet and low cost of using it permit the interconnection of new and existing information and communication technologies, and offers businesses and consumers a new and powerful information system and a new form of communication. This makes it possible for buyers and sellers to come together in more efficient ways and is creating new marketplaces and opportunities for the reorganization of economic processes. It is also changing the way products are customized, distributed and exchanged and how businesses and consumers search and consume products. 1.2 Definition of e-commerce and Categories of e-commerce 1.2.1 Definition of e-commerce Electronic Commerce seems to be everywhere these days. It’s nearly impossible to open a newspaper or magazine without coming across an article about how Electronic Commerce is going to change all our lives. Businesses of all sizes are bombarded with adverts that seem to imply that any company not investing in E-Commerce will be left behind. Electronic Commerce (EC) is the process of buying, selling, or exchanging products, services, and information via computer networks. 1. EC defined from these perspectives ▪ From a communications perspective, EC is the delivery of goods, services, information, or payments over computer networks or by any other electronic means. ▪ From a business process perspective, EC is the application of technology toward the automation of business transactions and work flow. ▪ From a service perspective, EC is a tool that addresses the desire of firms, consumers, and
management to cut service costs while improving the quality of goods and increasing the speed of service deli From an online perspective, EC provides the capability of buying and selling products and information on the internet and other online services From a collaborations perspective, EC is the framework for inter- and intraorganizational collaboration From a community perspective, EC provides a gathering place for community members to learn transact. and collaborate E-business is a broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organizatio 2. Pure vs. Partial EC based on the degree of digitization of product, process and delivery agent, we can get figure Exhibit I-I The Dimensions of Elect Electronic Core Digital Trad ional Commerce irtual Process igital Process Physical Process Figure1-4 Pure vs Partial In traditional commerce all dimensions are physical, and in pure eC all dimensions are digital. All other cubes include a mix of digital and physical dimensions. If there is at least one digital dimension we will consider the situation ec 3. An ec framework EC applications supported by infrastructure and 5 support areas: People, Public policy, Technical standards and protocols, Business partners and Support services(see Figurel-5
management to cut service costs while improving the quality of goods and increasing the speed of service delivery. ▪ From an online perspective, EC provides the capability of buying and selling products and information on the Internet and other online services. ▪ From a collaborations perspective, EC is the framework for inter- and intraorganizational collaboration. ▪ From a community perspective, EC provides a gathering place for community members, to learn, transact, and collaborate. E-business is a broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization. 2. Pure vs. Partial EC based on the degree of digitization of product, process and delivery agent, we can get figure 1-4. Figure1-4 Pure vs. Partial EC In traditional commerce all dimensions are physical, and in pure EC all dimensions are digital. All other cubes include a mix of digital and physical dimensions. If there is at least one digital dimension we will consider the situation EC. 3.An EC Framework EC applications supported by infrastructure and 5 support areas: People, Public policy, Technical standards and protocols, Business partners and Support services (see Figure1-5)
Exhibit 1. 2 A Framework for Electronic Commerce lectronic Commerce Appl Services Infrastructure Common business Messaging and Muitimedia content Network intrastructure Interfacir e information distribution publ shing infrastructure its, Transter Protocol. Chi XML VRML) Intranet. Extranet) directories/catalogs) Access(cell phone applications Management Figure 1-5 The Situation of E-commerce in Asia Pacific Region 1.2. 2 Distinction between e-commeree and e-business The terms e-commerce and e-business require some comment, as different people disti between e-commerce and e-business in different ways. In E-competent Australia(ANTA, e-business was taken to mean an individual company, enterprise or organisation or busine A. 2000). that uses e-commerce, e.g. the online travel agency travel. com. au could be called an e-business However, in defining e-commerce as 'doing business electronically'(Timmers, 1999) E-competent Australia(ANTA, 2000) was suggesting that e-commerce is an overarching set of business principles behind new ways of doing business electronically Key participants in the ANTA E-commerce Initiative Projects agreed in April 2001 to use the term e-business as the descriptor of doing business electronically, both within enterprises and externally, using computer networks or telecommunications. E-business is used to describe both the overarching set of business principles behind new ways of doing business electronically and also to describe actual businesses or business units that put these principles into practice E-commerce is now defined as it was some years ago, to narrowly mean the financial transactions of buying and selling electronically The AnTa project is now referred to as the ANTA E-business Initiative Different interpretations of the terms e-commerce and e-business may continue, in Australia, for some time, for the following reasons. Firstly, some people see e-business as interchangeable with the term e-commerce. Secondly, the popular media likes to use e-business instead of e-commerce and to place the prefix e- before many words, particularly in newspaper headlines Thirdly, academics are div ided in their definitions of the two terms, with some seeing e-commerce as the overarching concept and others seeing e-commerce narrowly as buy ing and selling electronically While we can expect that e-commerce and e-business will continue to be defined differently, present indications are that the term e-business may emerge as the most popular one in daily use, even though the project started by using the term e-commerce as the basic reference point
Figure1-5 The Situation of E-commerce in Asia Pacific Region 1.2.2 Distinction between e-commerce and e-business The terms e-commerce and e-business require some comment, as different people distinguish between e-commerce and e-business in different ways. In E-competent Australia (ANTA, 2000), e-business was taken to mean an individual company, enterprise or organisation or business unit, that uses e-commerce, e.g. the online travel agency travel.com.au could be called an e-business. However, in defining e-commerce as 'doing business electronically' (Timmers, 1999), E-competent Australia (ANTA, 2000) was suggesting that e-commerce is an overarching set of business principles behind new ways of doing business electronically. Key participants in the ANTA E-commerce Initiative Projects agreed in April 2001 to use the term e-business as the descriptor of doing business electronically, both within enterprises and externally, using computer networks or telecommunications. E-business is used to describe both the overarching set of business principles behind new ways of doing business electronically and also to describe actual businesses or business units that put these principles into practice. E-commerce is now defined as it was some years ago, to narrowly mean the financial transactions of buying and selling electronically. The ANTA project is now referred to as the ANTA E-business Initiative. Different interpretations of the terms e-commerce and e-business may continue, in Australia, for some time, for the following reasons. Firstly, some people see e-business as interchangeable with the term e-commerce. Secondly, the popular media likes to use e-business instead of e-commerce and to place the prefix e- before many words, particularly in newspaper headlines. Thirdly, academics are divided in their definitions of the two terms, with some seeing e-commerce as the overarching concept and others seeing e-commerce narrowly as buying and selling electronically. While we can expect that e-commerce and e-business will continue to be defined differently, present indications are that the term e-business may emerge as the most popular one in daily use, even though the project started by using the term e-commerce as the basic reference point
1.2.3 Classification of electronic commerce Business-to-business(B2B): EC model in which all of the participants are businesses otner organizations Business-to-consumer(B2C): EC model in which businesses sell to individual shoppers Business-to-business-to-consumer(B2B2C): EC model in which a business provides some product or service to a client business; the client business maintains its own customers, to whom the product or service is provided Consumer-to-business(C2B): individuals who use the Internet to sell products or services to organizations and /or seek sellers to bid on products or services they need Consumer-to-consumer(C2C): consumers sell directly to other consumers Mobile commerce(m-commerce): EC transactions and activities conducted in a wireless Location-commerce-(I-commerce ): m-commerce transactions targeted to individuals in Intrabusiness(organizational) EC: EC category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization Business-to-employee(B2E): EC model in which an organization delivers services, information, or products to its individual employees Collaborative commerce (c-commerce): EC model in which individual or groups communicate or collaborate online E-government: Government-to-citizens(G2C): EC model in which a government entity buys or provides goods, services, or information to businesses or individual citizens Exchange(electronic): a public e-market with many buyers and sellers Exchange-to-exchange(E2E): EC model in which elect to one another for the purpose of exchanging information 1. 2. 4 Benefits and limitations of electronic commerce 1. The benefits of EC: Benefits to Organization Expands the marketplace to national and international markets. Decreases the cost of creating, processing, distributing storing and retrieving paper-based information Allows reduced inventories and overhead by facilitating pull-type supply chain management com he pull-type processing allows for customization of products and services which provides petitive advantage to its implementers Reduces the time between the outlay of capital and the e receipt of products and services Supports business processes reengineering(BPR)efforts Lowers telecommunications cost- the Internet is much cheaper than value added networks 2. The benefits of ec: Benefits to consumers al/mo Enables consumers to shop or do other transactions 24 hours a day, all year round from st any location Provides consumers with more choi Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons proof. llows quick delivery of products and services(in some cases)especially with digitized cts Consumers can receive relevant and detailed information in seconds, rather than in days or Makes it possible to participate in virtual auctions Id Allows consumers to interact with other consumers in electronic communities and exchange asas well as compare experiences Facilitates competition, which results in substantial discounts
1.2.3 Classification of electronic commerce ▪ Business-to-business (B2B): EC model in which all of the participants are businesses or other organizations. ▪ Business-to-consumer (B2C): EC model in which businesses sell to individual shoppers. ▪ Business-to-business-to-consumer (B2B2C): EC model in which a business provides some product or service to a client business; the client business maintains its own customers, to whom the product or service is provided. ▪ Consumer-to-business (C2B): individuals who use the Internet to sell products or services to organizations and /or seek sellers to bid on products or services they need. ▪ Consumer-to-consumer (C2C): consumers sell directly to other consumers. ▪ Mobile commerce (m-commerce): EC transactions and activities conducted in a wireless environment. ▪ Location-commerce—(l-commerce): m-commerce transactions targeted to individuals in specific locations, at specific times. ▪ Intrabusiness (organizational) EC: EC category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization. ▪ Business-to-employee (B2E): EC model in which an organization delivers services, information, or products to its individual employees. ▪ Collaborative commerce (c-commerce): EC model in which individual or groups communicate or collaborate online. ▪ E-government: Government-to-citizens (G2C): EC model in which a government entity buys or provides goods, services, or information to businesses or individual citizens. ▪ Exchange (electronic): a public e-market with many buyers and sellers. ▪ Exchange-to-exchange (E2E): EC model in which electronic exchanges formally connect to one another for the purpose of exchanging information. 1.2.4 Benefits and limitations of electronic commerce 1. The benefits of EC: Benefits to Organization Expands the marketplace to national and international markets. Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information. Allows reduced inventories and overhead by facilitating pull-type supply chain management The pull-type processing allows for customization of products and services which provides competitive advantage to its implementers. Reduces the time between the outlay of capital and the receipt of products and services. Supports business processes reengineering (BPR) efforts. Lowers telecommunications cost - the Internet is much cheaper than value added networks (Vans) . 2. The benefits of EC: Benefits to consumers Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any location. Provides consumers with more choices. Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons. Allows quick delivery of products and services (in some cases) especially with digitized products. Consumers can receive relevant and detailed information in seconds, rather than in days or weeks. Makes it possible to participate in virtual auctions. Allows consumers to interact with other consumers in electronic communities and exchange ideas as well as compare experiences. Facilitates competition, which results in substantial discounts
3. The benefits of EC: Benefits to society Enables more individuals to work at home, and to do less traveling for shopping, resulting ess traffic on the roads, and lower air pollution Allows some merchandise to be sold at lower prices, benefiting less affluent people Enables people in Third World countries and rural areas to enjoy products and services which therwise are not available to them Facilitates delivery of public services at a reduced cost, increases effectiveness,and/or Improves quality 4. The limitations of ec Technical limitati ons There is a lack of universally accepted standards for quality, security, and reliability The telecommunications bandwidth is insufficient Software development tools are still evolving There are difficulties in integrating the Internet and EC software with some existing (especially legacy) applications and databases Special Web servers in addition to the network servers are needed(added cost) Internet accessibility is still expensive and/or inconvenient 5. The Limitations of Ec Nontechnical Limitations 1.2.5 Infrastructure of electronic commerce Firewalls, Web servers, proxy servers, caching and hosting. Just a few of the things you'll ave to consider when considering the infrastructure for an E-Commerce project 1. ISP/carri E-Commerce requires a fast and reliable link to the Net. There are numerous options available from 56K dial-up to multi-megabit fiber connections. These resources will help you select the right connection method and ISP for your business 2. Caching and P hing servers can make the difference between sluggish performance and a Web-site that ly flies. Find out ho orks and the best way to use it b-server is overloaded you buy a bigger server, right? Well maybe no buy more servers, or you could use some of the sophisticated traffic management solutions that are now available. Find out more about these options from this selection of links 4. Web Servers Electronic Commerce relies on the Web. The Web relies on Web servers to serve up the pages It follows that the Web server is probably the most critical component of an E-commerce system Would you know how to select the best Web server for your requirements? How much should you pay for the software? 5. Database servers Database servers are at the back-end of most medium and large E-Commerce projects Whether you have millions of dollars to spend, or are looking for some freeware, you'll find a
3. The benefits of EC: Benefits to society Enables more individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution. Allows some merchandise to be sold at lower prices, benefiting less affluent people. Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available to them. Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality. 4. The Limitations of EC: Technical limitations ▪ There is a lack of universally accepted standards for quality, security, and reliability. ▪ The telecommunications bandwidth is insufficient. ▪ Software development tools are still evolving. ▪ There are difficulties in integrating the Internet and EC software with some existing (especially legacy) applications and databases. ▪ Special Web servers in addition to the network servers are needed (added cost). ▪ Internet accessibility is still expensive and/or inconvenient 5. The Limitations of EC: Nontechnical Limitations ▪ Cost and justification. ▪ Security and privacy. ▪ Lack of trust and user resistance. 1.2.5 Infrastructure of electronic commerce Firewalls, Web servers, proxy servers, caching and hosting. Just a few of the things you'll have to consider when considering the infrastructure for an E-Commerce project. 1. ISP/Carriers E-Commerce requires a fast and reliable link to the Net. There are numerous options available from 56K dial-up to multi-megabit fiber connections. These resources will help you select the right connection method and ISP for your business. 2. Caching and Proxy Servers Caching servers can make the difference between sluggish performance and a Web-site that really flies. Find out how caching technology works and the best way to use it. 3. Load Balancing If your Web-server is overloaded you buy a bigger server, right? Well maybe not. You could buy more servers, or you could use some of the sophisticated traffic management solutions that are now available. Find out more about these options from this selection of links. 4. Web Servers Electronic Commerce relies on the Web. The Web relies on Web servers to serve up the pages. It follows that the Web server is probably the most critical component of an E-commerce system. Would you know how to select the best Web server for your requirements? How much should you pay for the software? 5. Database Servers Database servers are at the back-end of most medium and large E-Commerce projects. Whether you have millions of dollars to spend, or are looking for some freeware, you'll find a solution is this list
6. Application Servers We ith server-side scripting it is possible to make a Web server do a lot more than just deliver pages. However if you need to build complex Web-based applications you'll probably need a specialized Application server the click-to-agree kind of contract. Moreover, since most electronic signature legislation provides that an electronically signed contract is considered as valid as a printed contract in the eyes of the law, such contracts are good ev idence as well. Hence we will be seeing more and more electronically signed contracts in the near future Interstingly, it is the conservative nature of corporate legal departments rather than governments that is slowing the take up of electronic signatures know,predated Intemet e-commerce by a long time. Before companies were. probably Open EDI is in fact not that new. EDI (electronic data interchange ), as you Intemet, they used closed networks to exchange data via EDI While EDI is still widely in use, more and more transactions are taking place over the Internet using XML References I.Internethttp://www.slis.indianaedu/faculty/hrosenba.www/l561/syll 2.http://www.ispo.cec.be/ecommerce/legamaegal.html 3. Internat ional Data Cooperation. IDC Research(2002a). Wes tern Europe Pulls Ahead of United States E-newsletterdated3January.Internet:http://www.idc.com/get-doc.jhtml?containerld=ebt20020103 4. UN/CEFACT: United Nations Center for Trade Facilitation and Electronic business 5. United Nations Conference on Trade and Development, E-commerce and Development Report 2001 Internethttp://www.unctad.org/ecommerce 6. United Nations General assembly Fifty-sixth session law on Electronic Signatures of the United Nations Commission on International Trade Law. A/56/588, 24 January 2002 7. United Nations Commission on International Trade Law, Work ing Group IV(Electronic Commerce), Thirty-ninth session. Legal aspects of electron ic commerceElectronic contracting: prov isions for a draft convention. A/CN.9/GIV/P9511-15 March 2002 8. United Nations Conference on Trade and Development. E-commerce and Development Report 2004 Internet:http://www.unctad.org/templateS/webflyer.asp?intltemld=3356&lang=l 9. Internat ional Telecommunication Union(ITU)(2004). Internet Indicators: Hosts, Users and Numbers of PCs, 2003,2002and2001.Internet:http://www.itu.int/itu-d/icT/sTatistiCs 10. IDC (International Data Corporation) Research(2002). Western Europe Pulls Ahead of United States E-newsletterdated3January.Internet:http://www.idc.com/get-docjhtml?containerld=ebt20020103 11. Taylor Nelson Sofres. The TNS Interactive Global eCommerce Report 2002. Internet http://www.tnsofres.com/ger2002/home.cfm 12. Taylor Nelson Sofres. The TNS Interactive Global eCommerce Report 2002. Internet http://www.tnsofres.com/ger2002/home.cfm 13. International Telecommunication Union (ITU)(2004 ). Internet indicators: Hosts, users and numbers of PCs, 003,2002and2001.Internethttp://www.itu.int/itu-d/ict/statistics 14. United Nations Conference on Trade and Development. E-commerce and Development Report 2002 Internet http://www.unctad.org/tem cbflyer. asp? docid=2923&intl temID=1397&lang=l&r ts 15. Census Bureau (USA). Retail E-Commerce Sales In First Quarter 2004 Were $15.5 Billion, Up 28.1 Percent FromfiRstQuarter2003,CensusBureauReportsInternethttp://www.census.gov/mrts/www/datahtml /1q2004 html
6. Application Servers With server-side scripting it is possible to make a Web server do a lot more than just deliver Web pages. However if you need to build complex Web-based applications you'll probably need a specialized Application server. the click-to-agree kind of contract. Moreover, since most electronic signature legislation provides that an electronically signed contract is considered as valid as a printed contract in the eyes of the law, such contracts are good evidence as well. Hence we will be seeing more and more electronically signed contracts in the near future. Interstingly, it is the conservative nature of corporate legal departments rather than governments that is slowing the take up of electronic signatures! Open EDI is in fact not that new. EDI (electronic data interchange), as you probably know, predated Internet e-commerce by a long time. Before companies were using the Internet, they used closed networks to exchange data via EDI. While EDI is still widely in use, more and more transactions are taking place over the Internet using XML. References 1. Internet: http://www.slis.indiana.edu/faculty/hrosenba.www/L561/syll 2. http://www.ispo.cec.be/ecommerce/legal/legal.html 3. International Data Cooperation. IDC Research (2002a). Western Europe Pulls Ahead of United States. E-newsletter dated 3 January. Internet: http://www.idc.com/get-doc. jhtml?containerId=ebt20020103. 4. UN/CEFACT: United Nations Center for Trade Facilitation and Electronic Business. 5. United Nations Conference on Trade and Development, E-commerce and Development Report 2001. Internet: http://www.unctad. org/ecommerce/ 6. United Nations General Assembly Fifty-sixth session. Model Law on Electronic Signatures of the United Nations Commission on International Trade Law. A/56/588, 24 January 2002 7. United Nations Commission on International Trade Law, Working Group IV(Electronic Commerce), Thirty-ninth session. Legal aspects of electronic commerce—Electronic contracting: provisions for a draft convention. A/CN.9/WG.IV/WP95, 11~15 March 2002 8. United Nations Conference on Trade and Development. E-commerce and Development Report 2004. Internet: http://www.unctad.org/Templates/WebFlyer.asp?intItemID=3356&lang=1 9. International Telecommunication Union (ITU) (2004). Internet Indicators: Hosts, Users and Numbers of PCs, 2003, 2002 and 2001. Internet: http://www.itu.int/ITU-D/ict/statistics 10. IDC（International Data Corporation） Research（2002）. Western Europe Pulls Ahead of United States. E-newsletter dated 3 January. Internet: http:// www.idc.com/get-doc.jhtml?containerId=ebt20020103 11. Taylor Nelson Sofres . The TNS Interactive - Global eCommerce Report 2002. Internet: http://www.tnsofres.com/ger2002/home.cfm 12. Taylor Nelson Sofres . The TNS Interactive - Global eCommerce Report 2002. Internet: http://www.tnsofres.com /ger2002/home.cfm 13. International Telecommunication Union (ITU) (2004). Internet indicators: Hosts, users and numbers of PCs, 2003, 2002 and 2001. Internet: http://www.itu.int/ITU-D/ict/statistics 14. United Nations Conference on Trade and Development. E-commerce and Development Report 2002. Internet: http://www.unctad.org/Templates/webflyer.asp?docid=2923&intItemID=1397&lang=1&mode=highlights 15. Census Bureau (USA). Retail E-Commerce Sales In First Quarter 2004 Were $15.5 Billion, Up 28.1 Percent From First Quarter 2003, Census Bureau Reports. Internet: http://www.census.gov/mrts /www/data /html /1q2004.html